CFTC Seeks to Undo Gemini Settlement Over Flawed Crypto Enforcement Claims

Highlights:

• The CFTC asked a federal court to remove a settlement order after reviewing the original enforcement case.
• The Gemini settlement is facing scrutiny after the CFTC questioned whistleblower credibility.
• Gemini expanded its prediction market business as U.S. regulators softened crypto enforcement policies.

The U.S. Commodity Futures Trading Commission and crypto exchange Gemini filed a joint motion in Manhattan federal court on Wednesday. The filing asked the court to remove the January 2025 settlement order tied to the CFTC’s 2022 lawsuit against Gemini. Gemini paid a $5 million civil penalty after settling the enforcement case. However, the regulator now says the agency should not have filed the complaint under current enforcement standards.

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CFTC Moves to Vacate Gemini’s $5 Million Settlement in Rare Enforcement Reversal

• The CFTC and Gemini have jointly asked a New York federal court to vacate key parts of a January 2025 consent order tied to alleged 2017 bitcoin futures disclosures.
• After an internal… pic.twitter.com/OuzH2rjccJ

— Cryip (@Cryip_co) May 28, 2026

The CFTC sued Gemini over statements the exchange made during a Bitcoin futures contract review process. The CFTC claimed Gemini provided misleading information about auction volumes and liquidity linked to its Bitcoin futures product. The agency argued that the information affected manipulation risk assessments during the contract approval process. However, the CFTC said on Wednesday that the evidence supporting its 2022 lawsuit relied on weak and unreliable claims.

The CFTC stated in its court filing that continued enforcement of the January last year settlement no longer serves public interest. The joint filing also asked the court to remove the permanent injunction included in Gemini’s January settlement. The injunction barred Gemini from making false or misleading statements to the CFTC during future regulatory dealings.

Before filing the motion on Wednesday, the CFTC reviewed the case history, evidence, litigation tactics, and enforcement conduct tied to Gemini. The CFTC said the complaint relied heavily on allegations from a whistleblower whom the agency now considers unreliable. The CFTC also said the agency would not file the Gemini complaint today under its revised enforcement standards.

Gemini Settlement Faces Scrutiny Over Whistleblower Claims And Internal Conduct

The joint filing focused on whistleblower allegations that supported the investigation into Gemini’s Bitcoin futures contract. The CFTC said the complaint relied on claims made by a whistleblower in 2017. The whistleblower accused Gemini of inflating trading activity and customer demand tied to its Bitcoin futures contract. The CFTC later used those allegations to support claims that the Bitcoin futures product faced manipulation risks.

The CFTC said in Wednesday’s filing that the whistleblower lacked credibility and provided unreliable information during the investigation. The filing stated that the whistleblower relied on statements from Gemini’s former chief operating officer and a subordinate employee. The CFTC claimed Gemini’s former executive and another employee threatened Tyler and Cameron Winklevoss during internal company disputes.

The CFTC stated that two customers defrauded Gemini during the period reviewed in the enforcement case. The agency said two Gemini customers exploited the exchange’s preferential fee structure through a coordinated rebate-fraud scheme. The CFTC said the two customers admitted stealing nearly $7.5 million from Gemini through the arrangement.

Gemini challenged the CFTC’s enforcement action after the agency sued the exchange. Gemini accused the agency of conducting an abusive investigation and engaging in “lawfare” against the company. The filing also stated that the CFTC prevented Gemini from accessing evidence needed for its legal defense.

Political Pressure And Prediction Markets Reshape Crypto Oversight Debate

The Gemini case reversal came as the Trump administration changed U.S. crypto regulation and enforcement policies. The CFTC and SEC have recently dropped several crypto investigations and lawsuits involving digital asset companies.

Meanwhile, Gemini expanded its prediction market and regulated derivatives business. Gemini Titan launched its predictions marketplace after the CFTC approved the platform as a Designated Contract Market. In addition, the CFTC granted Gemini Olympus a derivatives clearing license in May.

The CFTC has exempted 19 prediction market platforms from swap data reporting and recordkeeping rules.

Beneficiaries include @Polymarket, @Kalshi, @Gemini Titan, and Bitnomial.

The letter allows firms to report event contracts in a form similar to futures and options, rather… pic.twitter.com/5gfh2vXE4s

— Satoshi Club (@esatoshiclub) May 14, 2026

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